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Piper Resources Ltd. Obtains CCAA Protection

CALGARY, Feb. 19 /CNW/ - Piper Resources Ltd. ("Piper" or the "Company")
announces that, after consideration of all available alternatives, the Board
of Directors of Piper has determined that it is in the best interests of all
stakeholders to seek creditor protection under the Companies Creditors
Arrangement Act (Canada), ("CCAA"). The Company has obtained such protection
pursuant to an Order from the Alberta Court of Queen's Bench (the "Court").
While under CCAA protection, the Company will continue with its day to day
operations.
Piper has been hindered by market, operational and financial challenges,
details of which will soon be available on the website www. deloitte.ca under
the insolvency and restructuring link. CCAA protection stays creditors and
others from enforcing rights against the Company and affords Piper the
opportunity to restructure its financial affairs and proceed with its
previously announced review of strategic alternatives. The Court has granted
CCAA protection for an initial period of 30 days, expiring on March 17, 2008,
to be extended thereafter as the Court deems appropriate. If by March 17,
2008, Piper has not filed a Plan (as defined below), or obtained an extension
of the CCAA protection, creditors and others will no longer be stayed from
enforcing their rights. Piper will issue a further press release on or before
March 17, 2008 to provide an update.
While under CCAA protection, the Board of Directors maintains its usual
role and management of the Company remains responsible for the day to day
operations, under the supervision of a Court appointed monitor who will be
responsible for reviewing Piper's ongoing operations, assisting with the
development and filing of a Plan of Arrangement ("Plan"), liaising with
creditors and other stakeholders and reporting to the Court. The Board of
Directors and management will be primarily responsible for formulating the
Plan for restructuring Piper's affairs.
The Plan is the proposed compromise that, in due course, Piper intends to
present to its stakeholders affected by the Plan. This Plan will describe how
Piper proposes to restructure its affairs. Those stakeholders affected by the
Plan will have an opportunity to vote upon it. If the Plan is approved by the
requisite number and value of affected stakeholders contemplated by law, the
Court must also approve it before the Plan may be implemented. At this time,
Piper is still in the process of developing its Plan for review and approval
by affected stakeholders and the Court in due course.
Although CCAA protection enables the Company to continue with its day to
day operations until the CCAA status changes, the implications for the Piper
shareholders are less clear. At the end of the restructuring process, the
value of what is left for shareholders will depend upon the terms of the Plan
approved by the affected stakeholders. If the affected stakeholders do not
approve the Plan in the manner contemplated by law, Piper will likely be
placed into receivership or bankruptcy.
Certain information regarding the Company contained herein may constitute
forward-looking statements. These statements relate to future events or future
performance of the Company. When used in this release, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", believe",
"estimate", "predict", "seek", "propose", "expect", "potential", "continue",
and similar expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties, and other
factors that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements. Such statements reflect
the Company's current view with respect to certain events, and are subject to
certain risks, uncertainties and assumptions. Many factors could cause the
Company's actual results, performance, or achievements to vary from those
described in this presentation. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying forward-looking
statements prove incorrect, actual results may vary materially from those
described in this release as intended, planned, anticipated, believed,
estimated, or expected.